Partial Private Circuits

1
Partial Private Circuits

• Kalpesh Brahmbhatt
• 31 October 02

2
What are Leased Lines

• Leased Lines are used to provide
• data/voice/Internet connections for businesses
• backbone for mobile networks
• ISP connections to the Internet
• UK leased lines market worth 1.3bn (99/00)
• An end to end Leased Line compromises of a
  Trunk Two Terminating Segments

3
Competition Analysis

• Effective Competition review in 2000
• Competition in prospect at the trunk level
• identified problems in market for terminating
  segments
• Solution - Partial Private Circuits - provided on
  cost oriented non discriminatory TCs

4
Solution

• Partial Private Circuits/ or Part leased lines

5
PPC history

• March 2001- Oftel required BT to negotiate
  provision of PPCs with 10 operators
• 14 weeks for BT OLOs to conclude negotiations
• BT launched PPCs 1 August 2001
• 2nd August - received requests for determination
  from OLOs

6
PPC history (cont.)

• OLOs migrated approx 40,000 retail circuits to
  PPCs since launch of product
• 7,000 new PPCs purchased by OLOs
• OLOs requested Oftel to determine cost oriented
  prices
• robust SLAs
• Migration procedures

7
Phase 1

• Phase 1 Direction - issued 14 June 2002
• Mainly dealt with stand alone contractual and
  technical issues which were hindering PPC take
  up.
• Included market analysis for leased lines market.
  
• BT has market power Terminating segments
• Trunk segments prospectively competitive
• More detailed issues on pricing and service
  levels deferred to Phase 2

8
Phase 2

• 10 September 02 Oftel published phase 2
  consultation document.
• Main proposals
• connection charges for PPCs will be reduced
  typically by 50 and rental charges by 30.
• reduced charges for migrating retail leased lines
  to PPCs

9
Phase 2 (cont)

• savings will be backdated to 1 August 2001, when
  the products were first introduced by BT
• comprehensive service level agreements - ensuring
  OLOs provided with same provisioning and repair
  times as BT retail
• new regime for forecasting penalties

10
Phase 2 - next steps

• Consultation closed on 8 October.
• Final Direction to be issued November 02.
• Currently assessing responses.
• OLOs broadly supportive.
• BT has concerns at calculation of charges and
  extent of SLA.

11
PPCs - Oftels aims

• To address competition concerns in market for
  terminating segments by encouraging take up of
  PPCs
• PPC Phase 1 - set out our market analysis -
  target competition concerns.
• Phase 2 - Applying proportionate regulation to
  remove obstacles which prohibit OLOs taking up
  PPCs -e.g. Costs reductions effective SLAs
• PPCs enable OLOs to compete with BT at Retail
  level